3. Does my sex or age affect the premium?
It is a known fact that women tend to live longer than men. A female who insures herself using a 'level-term' policy is likely to have lower premiums than a male. This is based on the fact that females live longer and are less likely to claim during the period insured.
However, if she took out critical illness protection it is likely that her premium will be higher than a males, as she is more likely to encounter a critical illness at some stage in the term.
Age is a factor in the successful application for a life policy. Most insurers have an age bracket for the provision of insurers (usually to the age of 75). If you are over 75 it is unlikely you will be able to find cover. If you want cover after the age of 75 it is important to take it out early.
Finally, the older you are the greater the risk to the insurance provider so the higher your premium will be. This starts from the earliest insured age and continues in brackets up to the age the insurer will cover to (e.g. 75).
Glossary of Life Insurance Terminology
Accident Cover
This is an option on your life cover policy, whereby if you can't work because of an accident, you receive either a regular income or a lump sum.
Beneficiary
The person who is to receive the benefit of your policy.
Cooling-off notice
This refers to the time that the customer has to think about and cancel the policy if they wish to. No charges apply in relation to a cancellation effected during a cooling off period.
Decreasing term
Life insurance which pays out a lump sum if you die within the term, but where the insurance sum assured reduces during the term. This is usually the cheapest form of life insurance and is required for anyone taking out a mortgage (unless waived in specific circumstances by the lender). This type of cover is usually called Life Home Cover. The aim of the policy is to enable your mortgage to be fully paid off in the event of death during the term of the policy.
Dual life
Each life is insured individually under one policy.
Executor
The person appointed within a will to carry out its instructions.
Guaranteed insurability
Option to take out (additional) life cover without having to provide medical evidence. Hospital cash cover You are paid a daily amount if you're in hospital.
Index linked / Indexation
The amount of your cover as well as your premium are increased each year in line with general inflation. This makes sure that the amount of cover you take out has the same spending power during the term of the cover.
Joint Life
Your benefit is paid on the death of just one of the people covered, once the benefit is paid the cover on the second surviving life stops.
Joint Life 1st event
Benefit is paid on the first death of either insured party
Joint Life 2nd event
Benefit is only paid on the death of the 2nd insured party
Lapse
If your policy lapses all cover ceases. This normally happens if your payments stop.
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Extra charge for cover, applied for underwriting reasons usually for medical or occupational reasons.
Life assured/ covered
The person upon whose death/illness, the benefit will be paid.
Life insurance /Life cover /Level term insurance
The simplest form of life insurance, which pays a fixed amount of money (lump sum) if you die during the term of the policy.
Medical evidence
Medical information you may have to supply to a life company. A life insurance company may seek medical information from your GP in certain circumstances or require an independent medical examination from a GP other than your family physican.
Non-disclosure
If when you first take out your policy you give incorrect information or fail to disclose anything which may affect a life company’s decision to accept your application. The life company can refuse to pay a claim.
Permanent Health Insurance (PHI)
Permanent Health Insurance will pay you an income if you become ill for a long period or if you become disabled and can't work. Most PHI policies have a waiting period of 13, 26 or 52 weeks but continue to pay you an income, in the event of a successful claim, until your normal retirement age or until you are fit to return to work, whichever occurs first.
Policy document
The legal document which sets out the basis on which your policy is issued and the benefits which are payable. Keep it safe! Policyholder The legal owner of the policy.
Premium (payment)
How much you regularly pay for your life assurance. This is usually paid monthly or annually.
Private medical attendants report
A life company may seek evidence of your medical history or status from your GP prior to accepting your application. The report your GP's issues to a life assurance company in called a PMA (Private Medical Attendants Report)
Renewable term insurance
Life insurance which pays out if you die within the period of protection, but which gives you the option to renew the cover at the end of the term without requiring further up to date medical evidence.
Specified illness cover/ Serious illness cover /Critical Illness Cover
Depending on your policy this cover pays you a lump sum, if you are diagnosed as suffering from one of a number of specified severe illnesses.
Trust
You can put a life insurance policy in trust so the proceeds of the policy go straight to your chosen beneficiaries when you die.
Trustee
A person who you nominate to carry out your instructions as given in your trust.
Underwriting
Where an insurance company takes into account known facts like your age, smoking status, previous health history and occupation in order to assess the likelihood of you making a claim on the policy. Your insurance payments are calculated after taking these factors into consideration.
Whole of life
Life insurance that you pay throughout life, rather than for a fixed term. Cover can be maintained throughout life provided you pay the required premium which is subject to review. |